Homebuilder Beazer Homes USA, Inc. (BZH) Thursday reported a significantly narrower loss in its second quarter, as revenues climbed by higher home closings and improved sales prices. Quarterly revenues exceeded analysts' expectations.
Looking ahead, the company expects to report positive net income in its fourth quarter, which should allow it to be profitable for the second half of fiscal 2013. Its outlook reflects a substantially higher backlog, improving margins and tight control of fixed costs. The shares are up about 7 percent in the pre-market trading.
In the second quarter, Homebuilding revenue surged 50.6 percent to $285.5 million. Average sales price from closings increased 12.7 percent to $253.3 thousand. Total home closings grew 33.5 percent to 1,127 homes.
Homebuilding gross profit margin, excluding impairments and abandonments increased 500 basis points to 15.9 percent.
The company said its new home orders improved 0.6 percent from last year. Cancellation rates were 18.7 percent, lower than 22.5 percent a year earlier. Total backlog from continuing operations was 2,211 homes with a sales value of $584.2 million, compared to 1,975 homes with a sales value of $465 million as of March 31, 2012.
Allan Merrill, CEO of the company stated, "...Improvements in closings, average sales price and gross margins enabled us to generate $15 million in adjusted EBITDA, the highest amount for our fiscal second quarter since 2007."
In the quarter, the company's net loss sharply narrowed to $19.64 million or $0.80 a share from $39.95 million or $2.54 a share in the previous year. Loss per share from continuing operations was $0.78, compared to a loss of $2.41 per share a year earlier.
On average, eight analysts polled by Thomson Reuters expected loss per share of $0.75 for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues for the quarter climbed to $287.9 million from $191.64 million in the prior year, which also came above consensus estimates of $252.24 million.
BZH closed Wednesday's regular trading at $16.79 on the NYSE. In the pre-market activity, the shares are up 7.21 percent.
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